Elmera Group ASA

Quarterly Report • May 14, 2020

Q1 2020 PRESENTATION

Rolf Barmen (CEO) Ole Johan Langenes (Acting CFO)

14th May

Q1 2020 HIGHLIGHTS

Rolf Barmen (CEO)

Highlights first quarter 2020

Strong profitability growth in an extraordinary situation

• Strong financial performance with a 27% YoY increase in net revenue and 31% YoY growth in EBIT adj.
• Favourable market dynamics with historically low elspot prices and positive effects on COGS are driving the improvement
• The solid growth in the Mobile segment continues, with more than 10k net adds in the quarter
• Outlook slightly revised based on first quarter results

Key Highlights
1 # of deliveries (end of period)	Δ in # of deliveries (QoQ)
621 348	-744
Increase of 2 % YoY	Of which org. growth -744
2 Volume sold	Gross revenue
4 154 GWh	NOK 1 310m
Decrease of -6 % YoY	Decrease of -49 % YoY
3 Net revenue (adj.) 2	3 EBIT (adj.) K6
NOK 481m	NOK 238m
Increase of 27 % YoY 9	Increase of 31 % YoY K7
Basic EPS (reported)	K13NIBD (cash)
NOK 1.76	(NOK 511m)
Increase of 37 % YoY	K19NIBD/LTM EBITDA: -0.68

Sources: Company information

• 1) Number of deliveries excl. Extended Alliance deliveries. Number of deliveries incl. Extended Alliance deliveries: 658,175
• 2) Not including Alliance volume. Volume turnover for alliance partners Q1 2020: 1,320 GWh

³⁾ Adj. Net revenue and EBIT are reported figures adjusted for any estimate deviations on sales and distribution of electricity related to previous reporting periods, special items, unrealised gains and losses on financial derivatives and depreciations from acquisitions

BUSINESS REVIEW

Rolf Barmen (CEO)

Operational and financial impact from Covid-19

• Both M&A activities and sales and marketing activities are continuing at a high level despite the Covid-19 situation
• Every EVP monitor and report the risk situation in their division on a weekly basis
• Accounts receivables are monitored from day to day
• We ensure that our customers know they can contact us regarding delay of payment – our goal is to balance low losses with CSR
• We monitor our around 400 employees and consultants daily regarding their health and well-being, making sure operations resume as normal
• Slight decrease in consumption in the Business segment due to reduced activity
• Increased voice activity in the Mobile segment driving COGS and reduces margins

Market development

Key highlights in Q1 2020

• Elspot prices have decreased throughout the quarter, ending at a historically low level
• Temperatures warmer than both the normal and last year in three out of three months1
• Jan: +6.1°C above normal (4.9°C warmer than 2019)
• Feb: +4.0°C above normal (0.5°C warmer than 2019)
• Mar: +2.4°C above normal (1.2°C warmer than 2019)
• The regulator recently published the market churn figures for 2019, showing a 21% annual churn in the consumer segment and 14% in the business segment3

Weekly elspot prices (NOK/kWh)2

Sources:

• 1) Temperature figures from met.no's monthly reports
• 2) Weekly system prices in NOK from Nordpool, forward prices from Montel

3) The Norwegian Water and Energy Directorate's supplier change statistics. The regulator also states that the 2019 figures are not comparable with previous years, as numbers from 2018 and earlier have been overreported

| Quarterly Presentation | Q1 2020

Segment development - Consumer

Key highlights in Q1 2020

• Decrease of 1,717 deliveries in Q1 2020
• Volume growth of 1% YoY, driven by increase in # of deliveries
• Avg. volume per delivery is down 1% YoY 4,287 kWh in Q1 2020 vs. 4,340 kWh in Q1 2019
• Mobile subscription overview now included in the Fjordkraft app and consumers with solar panels are able to virtually save excess production for later use

1) Number of electricity deliveries at the end of the period

# of electricity deliveries1 ('000)

Segment development - Business

• Positive organic growth in the segment
• Net additions in Q1 2020 were 973
• Volume decrease 13% YoY driven by decrease in avg. consumption per delivery from mild weather, fewer tender customers and Covid-19 restrictions
• Avg. volume per delivery decreasing -16% YoY 23,189 kWh in Q1 2020 vs. 27,653 kWh in Q1 2019
• New and environmental oriented concept "Klimasmart", including solar panels, heat pumps and monitoring services, has been well received by business customers

1) Number of electricity deliveries at the end of the period

Key highlights in Q1 2020 # of electricity deliveries1 ('000)

New Growth Initiatives

• The strong growth in the number of Mobile subscribers continues. Well on the way towards the targeted 125 thousand subscribers at the end of 2020

• Growth of 10,025 subscribers in Q1 2020

• 13% YoY Alliance volume decrease, as Vesterålskraft is now included in the Consumer and Business segments and due to mild weather

• One new Extended Alliance partner implemented and the first ever broadband customers handled in the Fjordkraft Factory on behalf of Alliance Partners this quarter

Key highlights in Q1 2020 # of Mobile subscribers1 ('000)

Sources: Company information

1) Number of mobile subscribers at the end of the period

FINANCIAL REVIEW

Ole Johan Langenes (Acting CFO)

Strong net revenue growth

• Adj. net revenue growth driven by margin improvement – Consumer segment with the biggest impact

• Favourable market dynamics with historically low elspot prices and positive effects on COGS are driving the improvement YoY
• Last twelve months adj. net revenue improvement driven by margin improvement1 YoY

Sources: Company information

1) New Growth Initiatives figures are excluded from the calculations, as high volumes with very low margins distorts the analysis

Continued increase in EBIT adj.

• EBIT improvement of 56 NOKm with the Consumer segment as the driver for the increase

• The increase in OPEX primarily driven by sales and marketing cost, administrative costs and expected increase in losses on receivables due to Covid-19
• Adj. EBIT margin increasing 1 pp YoY. Adj. EBIT margin LTM is increasing 2 pp YoY and 1 pp quarter over quarter

Sources: Company information

| Quarterly Presentation | Q1 2020

Segment overview

• Increase in adj. net revenue YoY. Margin improvement accounting for more than 95% of the increase. Favourable market dynamics driving the growth

• 5 pp margin expansion driven by net revenue growth

• Increase in adj. net revenue is driven by improved margins, primarily from power sales

• 5 pp margin contraction driven by expected increased losses on receivables due to Covid-19

• Adj. net revenue and adj. EBIT decrease primarily from reduced margins within Mobile. Increased call activity from Covid-19 driving COGS

• Solid growth in # of Mobile subscribers

Sources: Company information

Seasonally increase in NWC as el.cert for 2019 is settled and volume increase

Net working capital1 (NOKm)

• Net working capital (NWC) is increasing by 251 NOKm from last quarter, driven by settlement of el certificates and higher volumes
• The settlement of el certificates from 2019 is increasing NWC in Q1 2020. However, this postpayment practice of el certificates has a positive effect on NWC throughout the year
• Volume increase 4% from last quarter2
• Elspot prices decrease 60%3 from Q4 2019 to Q1 2020
• Reduction of 376 NOKm from last year, driven by 65% lower prices3 and 6% lower volume
• Continuous improvements in the invoicing process is also contributing positively to the development

Sources: Company information

• 1) NWC includes the following items from current assets: Inventories, intangible assets, trade receivables, derivative financial instruments and other current assets (that is, all current assets in the balance sheet except cash and cash equivalents); and the following items from current liabilities; trade payables, current income tax liabilities, derivative financial instruments, social security and other taxes and other current liabilities excl. 55.6 NOKm in short-term interest bearing debt
• 2) Volume sold in the Consumer and Business segments
• 3) Average of daily system prices in NOK

| Quarterly Presentation | Q1 2020

Strong underlying cash generation

Change in net cash Q-o-Q (NOKm)

Sources: Company information

1) OpFCF defined as EBITDA adj. less CAPEX excl. M&A and payments to obtain contract assets

2) Non-cash NWC relates to items included in "change in NWC" that are not affecting net cash position. Other includes interest, tax, change in long-term receivables, proceeds from non-current receivables, proceeds from other long-term liabilities, share based payment expense, change in post-employment liabilities, payment of lease liability and adjustments made on EBITDA.

| Quarterly Presentation | Q1 2020

Outlook for 2020-20221

Group	 	Targeting high-single digit net revenue growth on an organic basis Targeting an EBIT margin of 36-38%
	 Growth	Ambition to act as a consolidator in a fragmented market  Targeting mid-single digit net revenue growth on an organic basis	Revised in Q1: Expected somewhat higher
Consumer	EBIT  Targeting a sustainable level of 32-34% on an organic basis margin		than targeted for 2020
	Growth	 Targeting double digit net revenue growth in 2020, followed by a sustainable mid-single digit annual growth in 2021 and 2022	Revised in Q1: Expecting mid-single digit growth in 2020 due to Covid-19
Business	EBIT margin	 Targeting a sustainable level of 52-54% on an organic basis
New growth		Targeting a stable nominal EBIT from 2019 to 2020. Positive development in both Alliance and Mobile, while new spin offs negatively affect the segment EBIT in 2020 with in the area of -10 NOKm.	Revised in Q1: 2020 EBIT expected weaker than targeted mainly due to Covid-19. Still expecting a slight positive development
initiatives		NGI targeted to comprise up towards 5% of group EBIT in 2022	adjusted from impact of new spin offs
Cap.ex.		Targeted to be in the area of NOK 50m annually on an organic basis
Tax rate		Prevailing corporate tax rate for Norway – 22% for 2020
Leverage	 	Moderate leverage with variations intra-year due to seasonality in net working capital Current balance sheet enabling substantial capacity to finance acquisitions
Dividend	 	Target pay-out ratio of at least 80% of net income, adjusted for certain cash and non-cash items2 Attractive and increasing dividend

1) All targets are based on adjusted figures, further described under alternative performance measures in the quarterly report 2)Adjusted EBIT + net finance – estimated tax – amortisation of acquisition debt

Appendix

PROFIT AND LOSS ACCOUNT

NOK in thousands	Note	Q1 2020	Q1 2019	Full year 2019
Continuing operations
Revenue	2,9	1310256	2545634	7122528
Direct cost of sales	2	(828855)	(2167273)	(5827394)
Revenue less direct cost of sales		481 402	378 361	1 295 134
Personnel expenses	Z	(78596)	(64426)	(236106)
Other operating expenses	2	(124593)	(97908)	(379973)
Depreciation right-of-use assets		(3100)	(2213)	(10404)
Depreciation and amortisation	2,5,6	(45647)	(42880)	(190528)
Total operating expenses		(251936)	(207 426)	(817011)
Other gains and losses, net	7	1906	8	4615
		231 371
Operating profit			170 942	482738
Income (loss) from investments in associates and joint ventures	12	(153)
Interest income		6381	4882	20 07 1
Interest expense lease liability		(429)	(193)	(1677)
Interest expense		(1658)	(1578)	(6956)
Other financial items, net		240	(1086)	(3737)
Net financial income/(cost)		4 3 8 2	2026	7701
Profit/ (loss) before tax		235 754	172 968	490 440
Income tax (expense)/income	З	(52084)	(38543)	(120269)
Profit/ (loss) for the period		183 670	134 425	370 171
Basic earnings per share (in NOK)*	4	1,76	1.29	3,54
Diluted earnings per share (in NOK)*	4	1,74	1,27	3,51

ADJUSTED EBIT reconciliation

NOK in thousands	01 2020		01 2019 Full year 2019
Revenue adjusted	1310256	2545634	7 066 432
Corporate 1)			56 096
Revenue	1 310 256	2 5 4 5 6 3 4	7 122 528
Direct cost of sales adjusted	(828855)	(2167273)	(5782711)
Corporate 1)			(44681)
Direct cost of sales	(828855)	(2167273)	(5827394)
Revenue less direct cost of sales adjusted	481 402	378 361	1 283 7 21
Corporate 1)			11414
Revenue less direct cost of sales	481 402	378 361	1 295 134
Total operating expenses adjusted	(243760)	(196424)	(792668)
Special items 2)			21 218
Depreciation of acquisitions 3)	(8177)	(11002)	(45560)
Total operating expenses	(251936)	(207 426)	(817011)
Other gains and losses 4)	1906	8	4615
Operating profit	231 371	170942	482738
Income/loss from investments in associates and joint ventures	(153)
Interest income	6381	4882	20071
Interest expense lease liability	(429)	(193)	(1677)
Interest expense	(1658)	(1578)	(6956)
Other financial items, net	240	(1086)	(3737)
Profit/(loss) before tax	235 754	172968	490 440

ADJUSTED EBIT reconciliation cont.

NOK in thousands	01 2020		Q1 2019 Full year 2019
Special items incurred specific to:
- acquisition related costs and implementation costs	$\sim$	$\sim$	(3145)
- change in pension plan	$\sim$	$\sim$	28 969
- Impairment charge	$\sim$		(4606)
Special items			21 218

NOK in thousands	01 2020		01 2019 Full year 2019
TrønderEnergi Marked acquisition	(5180)	(7788)	(32 753)
Oppdal Everk Kraftomsetning acquisition	(787)	(1 085)	(4342)
Vesterålskraft Strøm acquisition	(565)		1 516)
Other customer acquisitions	(1645)	(2129)	(6949)
Depreciation of acquisitions	(8177)	(11002)	(45 560)

BALANCE SHEET

NOK in thousands	Note	31 March 2020	31 March 2019	31 December 2019
Assets:
Non-current assets
Right-of-use assets property, plant and equipment		62 255	29048	6597
Property, plant and equipment	5	6656	4050	71(
Goodwill	6	166 696	155849	16669
Intangible assets	6	166816	197 459	1785
Cost to obtain contracts		154149	150 559	1592
Investments in associates and joint ventures	12	9847
Other non-current financial assets		39510	22 9 57	2530
Total non-current assets		605 929	559923	6029
Current assets
Intangible assets	6	4730	31799	2370
Inventories		452	261	7 0
Trade receivables	8	867893	1970534	1 507 40
Derivative financial instruments	7	350 901	177539	792
Other current assets		113324	113727	184
Cash and cash equivalents		691735	213027	7755
Total current assets		2029035	2 506 886	2 4 0 5 2 9
Total assets		2 634 964	3 066 809	3 008 22
Equity and liabilities:
Equity
Share capital		31 372	31 349	3134
Share premium		127353	125 035	1250
Retained earnings		1005256	849 945	8468

BALANCE SHEET

NOK in thousands	Note	31 March 2020	31 March 2019	31 December 2019
Non-current liabilities
Net employee defined benefit plan liabilities		100 008	85658	64062
Interest-bearing long term debt	10	125 100	180700	139000
Deferred tax liabilitites	З	17667	17213	27 451
Lease liability - long term		52848	20510	56515
Other provisions for liabilities			732
Total non-current liabilites		295 623	304812	287 027
Current liabilities
Trade and other payables	8	388040	1065031	818143
Current income tax liabilities	3	76 160	62 474	111 656
Derivative financial instruments	7	337719	169334	67 999
Social security and other taxes		105 678	97 987	142 620
Lease liability - short term		11951	8659	11428
Other current liabilities		255812	352 185	566 129
Total current liabilities		1175360	1755 668	1717976
Total liabilities		1470983	2 060 480	2 005 004
Total equity and liabilities		2 634 964	3 066 809	3 008 220

CASH FLOW

NOK in thousands	Note	Q1 2020	01 2019	Full year 2019
Operating activities
Profit/(loss) before tax		235754	172968	490 440
Adjustments for
Depreciation	5, 6	17 257	18057	82 158
Depreciation right-of-use assets		3100	2213	10404
Amortisation of contract assets		28 391	24823	108370
Interest income		(6381)	(4882)	(20071)
Interest expense lease liability		429	193	1677
Interest expense		1658	1578	6956
(Income) /loss from investments in associates and joint ventures		153
Change in long-term receivables		(13820)	(2446)	(2879)
Share based payment expense		777	868	2994
Change in post-employment liabilities		2582	6350	(29556)
Payments to obtain a contract		(23304)	(25470)	(117693)
Changes in working capital (non-cash effect)
Impairment loss recognised in trade receivables		16736	12566	23 502
Change in fair value of derivative financial instruments		(1906)	(8)	(4615)
Changes in working capital
Inventories		342	272	(262)
Trade receivables	8	622838	23 2 28	489 360
Purchase of el-certificates	б	(245712)	(240 864)	(242 596
Non-cash effect from cancelling el-certificates	б	263782	235 295	246 569
Purchase of quarantees of origination	б	(1397)	(6195)	(12975)
Non-cash effect from disposal of guarantees of origination	б	2357	13559	18837
Other current assets		(94858)	(80986)	20715
Trade and other payables	8	(430103)	(35155)	(297 054)
Other current liabilities		(347136)	(181588)	72 774
Cash generated from operations		31 5 36	(65623)	847 054
Interest paid		(2209)	(1585)	(8627)
Interest received		6381	4882	20 07 1
Income tax paid	з	(90024)	(73906)	(93793)
Net cash from operating activities		(54316)	(136 232)	764 704

CASH FLOW

NOK in thousands	Note	01 2020	01 2019	Full year 201
Investing activities
Purchase of property, plant and equipment	5		(113)	(3791
Purchase of intangible assets	6	(15079)	(15357)	(47 589
Sale of intangible assets	6	10000
Net cash outflow on aquisition of subsidiares				(22 0 66
Net cash outflow on aquisition of shares in associates	12	(10000)
Net (outflow)/proceeds from non-current receivables		(325)	(422)	(2396)
Net (outflow)/proceeds from other long-term liabilities			(74)	(805
Net cash used in investing activities		(15404)	(15965)	(76 648
Financing activities
Proceeds from issuance of shares	4	2341
Dividends paid	4			(229 892
Proceeds from interest-bearing long term debt
Instalments long term debt		(13900)	(13900)	(55 600
Payment of lease liability		(2522)	(2284)	(8436)
Net cash used in financing activities		(14081)	(16184)	(293 930
Net change in cash and cash equivalents		(83 801)	(168382)	394 12

Cash and cash equivalents at start of period		381 409	381 409
Cash and cash equivalents at end of period	691 735	213027

FORWARD-LOOKING STATEMENTS

This presentation contains, or may be deemed to contain, statements that are not historical facts but forward-looking statements with respect to Fjordkraft's expectations and plans, strategy, management's objectives, future performance, costs, revenue, earnings and other trend information. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Fjordkraft.

All forward-looking statements in this presentation are based on information available to Fjordkraft on the date hereof. All written or oral forwardlooking statements attributable to Fjordkraft, any Fjordkraft employees or representatives acting on Fjordkraft's behalf are expressly qualified in their entirety by the factors referred to above. Fjordkraft undertakes no obligation to update this presentation after the date hereof.

For more information: Fjordkraft's Investor Relations Morten A. W. Opdal +47 970 62 526 morten.opdal@fjordkraft.no